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Liners Announce Emergency Bunker Surcharges

1.6.2018

In the wake of rising fuel costs, container carriers, including the three largest — Maersk Line, Mediterranean Shipping Company and CMA CGM — have announced new bunker surcharges.

Earlier this week MSC said in an announcement, “The continued surge in bunker prices has greatly impacted the operating environment for container shipping lines. Fuel prices are up more than 30 percent this year, and almost 70 percent since last June. Prices in Europe exceeded $442 per metric ton last week. With crude oil today hovering around $80 a barrel — the highest since 2014 — the situation is no longer sustainable without emergency action.”

In a letter to customers on its website, MSC did not spell out the exact size of the charge, but said it was introducing a worldwide temporary emergency bunker surcharge on all ocean and land-based cargo carriage with immediate effect. MSC said the “last-resort measure is essential to ensure that we navigate these challenging economic conditions in a steady and sustainable way and continue to provide a high quality of service to all our customers.”

An announcement from Maersk Line recently said its emergency bunker surcharge (EBS) of $60 on 20-foot containers and $120 on 40-foot and 45-foot dry containers will go into effect June 1 on many trades, but July 1 on “regulated corridors” including lanes to and from the United States.

“The increase in bunker price in 2018 has been significantly higher than what had been expected and has now reached a level of $440 per ton in Europe, the highest since 2014. The increase is more than 20 percent compared to the beginning of the year and this unexpected development means it is no longer possible for us to recover bunker costs through the standard bunker adjustment factors,” the world’s largest container carrier said.

Maersk said the EBS is “a necessary action to ensure a continued sustainable service to our customers.”

For refrigerated containers the EBS will be even higher, $90 for a 20-foot container and $180 for a 40-foot container.

Maersk said the EBS is based on the price of IFO 380 bunker fuel in Rotterdam being $440.

It said it will adjust the EBS up or down if certain “trigger prices” are reached:

• “Should the bunker price (IFO380 in Rotterdam) increase to a level of $530, EBS tariffs will be multiplied by a factor of 2.0.

• Should the bunker price (IFO380 in Rotterdam) decrease to a level of $370, EBS tariffs will be zero.”

Maersk said the EBS is effective June 1 for nonregulated corridors and July 1 for regulated corridors, including the United States (including Puerto Rico and American Samoa), Colombia and Taiwan.

“For trades subject to the U.S. Shipping Act or the China Maritime Regulations, quotations or surcharges that vary from the Maersk Line tariff shall not be binding on Maersk Line unless included in a service contract or service contract amendment that has been filed with the Federal Maritime Commission (FMC) or the Shanghai Shipping Exchange (SSE), as applicable.”

Maersk said the EBS will be applicable to all cargo on all trades, except for export shipments from China. However, in a separate announcement, Maersk announced it will introduce a similar-size peak season surcharge for exports from China — $60 for 20-foot containers and $120 for 40-foot dry containers and $90 for 20-foot reefers and $180 for 40-foot reefers. Again, this peak season surcharge will go into effect on June 1 for most of the world, but July 1 for exports to the United States and Puerto Rico.

CMA CGM said "Due to the significant increase in bunker prices since the beginning of the year and to keep ensuring the highest quality of service to its customers, CMA CGM Group will recover bunker costs through its bunker related surcharges which will be applied to all cargo on all worldwide trades" from June 1 (date of loading) for non-FMC trades and from July 1 for trades to and from Tawian and the U.S. CMA CGM said the amount of the surcharge was $55 per TEU for dry containers and $85 per TEU for reefer containers.

James Hookham, deputy chief executive of the Freight Transport Association in the U.K., who is succeeding Chris Welsh as secretary general of the Global Shippers Forum, said that he expected other carriers may follow Maersk in announcing additional fuel surcharges.

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